Vietnam has certain conditions for a strong recovery according to VinaCapital's Chief Economist

According to VinaCapital Chief Economist Michael Kokalari, Covid-19 will not leave a big scar on Vietnam like some other emerging markets, as forecasted by the World Bank.

In contrast, Vietnam has certain conditions for a strong recovery when it reaches the new normal.

Reports by the World Bank and some other international organizations say Covid-19 will leave a long-term injury, leading to a reduction in the growth prospects of some in emerging markets in years to come.

Michael Kokalari, Chief Economist of VinaCapital. (Photo: Vietnambiz)

However, Michael Kokalari, Chief Economist of VinaCapital, Vietnam said that Vietnam's GDP growth would remain positive, and businesses were gradually adapting to the current situation.

Foreign investors have faith in the Vietnamese market

Prime Minister Pham Minh Chinh visited a phone factory and worked with Samsung Electronics Vietnam Thai Nguyen company. Samsung Vietnam's general director said that he fully believed in the pandemic prevention solutions of the Vietnamese government.

He believed that the situation would soon be stable, despite the complicated current situation in Ho Chi Minh City and southern provinces.

In a report by vietnamtimes.org.vn, the interests and rights of foreign investors in Vietnam are protected. As a result, the industrial production index in August 2021 fell 4.2% from the previous month, a much less severe than the 15% drop in April 2020, when Covid-19 first stroke. Moreover, northern provinces, where most Japanese and Korean electronics manufacturers are located, still recorded an increase of 10% in the industrial production index over the same period last year.

Examples of the Vietnamese economy's rapid adaptation

Many Vietnamese businesses have recently made great efforts in adapting to the new situation, to meet the needs of local consumers. For example, banks have started to offer more types of online services, including opening accounts, approving small loans. Bach Hoa Xanh chain in Ho Chi Minh City receives nearly 50,000 online orders per day. Some real estate companies are now offering virtual tours of their new building projects.

According to a survey by the World Bank, the percentage of Vietnamese businesses using digital platforms and social networks to sell products has increased from less than 50% in mid-2020 to nearly 75% at the beginning of this year. Vietnamese consumers have also quickly adapted to these shopping methods.

The Vietnamese government has set a target that by 2025 and by 2030, the digital economy will account for 20% and 30% of the country's GDP, respectively. The Covid-19 pandemic has been posing countless challenges to Vietnam, but it is partly promoting the development of the country's digital economy. The same situation is reported in many other countries as well.